The Impacts of Shopping Tourism on Retail Sales and Rents: Lessons from the COVID-19 Quasi-Experiment of Hong Kong

Abstract

This research studies the impact of shopping tourism on retail sales and rents, using the COVID-19 pandemic as a quasi-experiment. Shopping tourism refers to individuals who travel primarily for shopping purposes, and their spending patterns can have significant effects on the retail sector. The COVID-19 pandemic disrupted global travel and resulted in a decline in shopping tourist arrivals, leading to a downturn in sales for retailers dependent on shopping tourism. Additionally, the decline in shopping tourism affected retail rents, as the reduced demand for retail spaces posed challenges for property owners in attracting tenants. The study focuses on Hong Kong, a prominent shopping destination, which experienced a significant decline in tourist arrivals and retail sales during the pandemic. The research analyses the relationship between tourist arrivals, retail sales, and rents using time series analysis and identifies the impact of shopping tourism on retail rents. The findings suggest a positive association between tourist arrivals and retail sales and rents, particularly during the period of shopping tourism growth. However, the pandemic severely reduced this effect, revealing the impact of shopping tourists on the retail sector. The study concludes by discussing the implications for retail resilience and highlighting the need for further research on the impacts of shopping tourism on retail sales and rents.